Early Friday morning local time, US President Trump said that he would start sending letters to trading partners on July 4, setting unilateral tariff rates, and stated that tariffs ranging from 10% to 70% would be imposed on 10 to 12 countries starting from August 1. Meanwhile, US Treasury Secretary Jason Bessent disclosed that about 100 countries might face an equivalent tariff rate of 10%.
The Trump administration announced in early April this year that it would impose unilateral high reciprocal tariffs on some countries, but then suspended the implementation for 90 days to give countries time for negotiations. During the grace period, it implemented a 10% reciprocal tariff. Now, as the July 9th negotiation deadline approaches, Trump's move undoubtedly exerts greater pressure on those trading partners who have not yet reached an agreement with the United States, and may have a profound impact on global trade, capital markets and the textile and apparel sector.
Survival stories of Various Countries: The UK and Canada are busy making concessions
Although the United States and Vietnam reached an agreement on July 2nd, reducing tariffs on Vietnamese goods from the originally planned 46% to 20%. However, negotiations with most key trading partners remain deadlocked, with few signs of breakthrough.
The UK was the first country to reach an agreement with the US. The British government agreed to make concessions on the import of American food and agricultural products in exchange for the US reducing tariffs on British car exports. The US side still retains the benchmark tariff of 10%.
However, it is worth noting that this agreement is more like a framework. The Economic Prosperity Agreement signed by the two sides at the G7 summit only implemented tariff preferences for British automobiles and aerospace products, while the reduction of tariffs on steel and pharmaceuticals still awaits further negotiations and has not fully fulfilled the earlier commitments made by both sides.
At present, the UK still faces a 25% tariff on the export of these products. If the two sides fail to reach an agreement before the negotiation deadline, the tariff may double to 50%.
Canada, which is also facing a choice, has recently made a compromise. Under the pressure of Trump's announcement of the termination of negotiations, the Canadian Ministry of Finance dramatically announced on June 29 that it would cancel the digital services tax plan targeting US tech giants, which was originally scheduled to take effect the next day.
The cancellation of the digital tax aims to restart trade negotiations with the United States before July 21 and prevent the escalation of the trade war. Previously, Canada had taken a tough stance, but eventually chose to make concessions in exchange for a negotiation window.
There is a glimmer of hope in the China-Us negotiations, while Japan, South Korea and Europe remain at the center of the storm
On June 27, a spokesperson for the Ministry of Commerce stated that under the guidance of the consensus reached by the heads of state of the two countries, the economic and trade teams of both sides held economic and trade talks in London from June 9 to 10, and reached a principle agreement on implementing the important consensus reached by the two heads of state during their phone call on June 5 and consolidating the framework of the Geneva economic and trade talks. After the London talks, the teams from both China and the United States maintained close communication. Recently, with approval, both sides further confirmed the details of the framework. China will approve the export applications of controlled items that meet the conditions in accordance with the law. The US side will accordingly lift a series of restrictive measures taken against China.
The spokesperson said that it is expected that the US side will work with China in the same direction, follow the important consensus and requirements reached by the two heads of state during their call on June 5, further leverage the role of the China-Us economic and trade consultation mechanism, continuously enhance consensus, reduce misunderstandings and strengthen cooperation, and jointly promote the healthy, stable and sustainable development of China-Us economic and trade relations.
However, many of the United States' major trading partners, including Japan, South Korea and the European Union, are still striving to finalize agreements with the United States before the deadline. The Trump administration initially planned to reach 90 agreements within 90 days. This ambitious goal was questioned by trade experts, who believed that complex trade negotiations were difficult to complete in such a short period of time.
Trump is optimistic about reaching an agreement with India, but has recently made stern comments on the prospects of reaching an agreement with Japan. He criticized Japan for being "spoiled", refusing to import American rice in the face of a rice shortage, and being reluctant to purchase American cars. He even threatened to impose tariffs on Japan at "30%, 35% or other rates we decide".
On the trade deal between the United States and the European Union, US Treasury Secretary Scott Bessant hinted at the possibility of reaching an agreement after meeting with the European Commission's commissioner for trade and economic Security, Marosch Sefjovic, in Washington on the 3rd. He also said that US trade officials would "work hard with European officials over the weekend."
Japanese and South Korean enterprises are crying out in pain, sounding the alarm for the global economy
Tariff policies have exacerbated global trade inequality, and their chain reactions have emerged in many countries: A survey by the Japanese government shows that due to the drag of US tariffs, the confidence of large enterprises in Japan deteriorated significantly in the second quarter. The South Korean automotive industry is shrouded in gloom, with a sharp decline in exports to the United States. Mexican auto parts manufacturers have also been hit hard, with the delivery cycle of vehicles being forced to extend, directly threatening the operational continuity and stability of the entire North American automotive industry chain.
Cuban scholar Pavel Aleman sharply pointed out that the real purpose of the United States in imposing tariffs is not to solve its own economic problems, but to try to shift its heavy debt burden and at the same time put pressure on its trading partners to maintain its global hegemony and geopolitical interests. This unilateralist act has brought unnecessary turmoil and losses to the global trading system and the economies of various countries.
According to the latest data released by the US Department of Commerce on June 27th, the trade deficit in goods soared to 96.6 billion US dollars in May, surging by 11% month-on-month, indicating that the trade imbalance has not improved but worsened instead. What is even more worrying is that the US GDP contracted by 0.5% quarter-on-quarter on an annualized basis in the first quarter of this year. This is the first quarterly contraction since the beginning of 2022.
The latest report released by the World Bank predicts that the global economic growth rate will be 2.3% in 2025, the lowest since the 2008 global financial crisis. This is the weakest performance of the global economy in 17 years. The World Bank also said that the growth rates of 70% of the world's economies have been revised downward this year.
The US tariff policy has dealt a heavy blow to the textile and garment industry, intensifying the chain reaction of the industrial chain. American cotton farmers are facing overstocking, orders for Chinese chemical fiber factories have sharply declined, and a mountain of clothing containers has piled up at the port of Los Angeles. When the price of clothing exceeds the affordability of consumers, it will trigger a systemic crisis from manufacturing to retail. As the August tariff deadline approaches, where will this storm that has erupted in Washington lead the global textile industry?
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